In Marketing for Lawyers Free is Bad
Most attorneys think offering a free consultation is mandatory. Free consultations are no bargain. Not for the lawyer and not for the client. Here’s why:
A Free Consultation Immediately Positions You Poorly
People believe they get what they pay for. Affluent people and business owners keep this ideal present in their minds at all times. Most people have this permanently ingrained in their psyche. Charging nothing means you are worth nothing.
You Welcome Shoppers
There are a handful of people out there who would shop for a bargain in parachute repair. If you want to meet with all of these people, do not charge for a consultation. Free consultations welcome shoppers to your law firm. You can be certain that if you do not charge people for an initial consultation, people will meet with you just to get a number out of you.
You Devalue Your Time
What is your time worth? If you charge nothing it is worth nothing. Not to you and not to your client. It is that simple.
The Quality of Your Clients/Matters Decreases
If you want crappy matters, a free consultation is definitely the way to go. Money tends to be an indication of how seriously someone is taking an issue. If you are willing to spend $250 on something are you more likely to pay attention to the outcome?
You Take on Liability with No Upside
In a free consultation you will often dispense advice. When you do, you expose yourself to liability. If the person sitting across from you implements your advice and things go badly, they will find you. You do this with no compensation in return.
One of the arguments I hear all the time is: “It is customary in my practice area to offer free consultations. Everyone does it.” Following a majority does not always mean you are acting in your own best interest. In fact, it probably means you are doing what the average industry professional will do. Do you want to be average?
This decision should be easy. When someone comes to your office to discuss a legal matter, they should pay you something. That is one of the reasons you do what you do. This is a business as well as a profession. Treat it like a business.
Return On Your Law Firm Marketing Investment
How do you evaluate law firm marketing investments?
How do you decide if you should sponsor an event, place an ad in a trade magazine or join a referral service?
The best way to make this decision is to look at the potential Return on Investment from each initiative.
There are three things to take into account when looking at Law Firm Marketing ROI. They are:
- Target Client and Referral Source Profile
- Lifetime Value of the Relationship
- Cost of Acquisition of a New Client
These are all complex ideas which must be covered in detail but here is a brief summary:
Target Client and Referral Source Profile
If you are targeting consumers (family law, criminal law, immigration) your approach to marketing will be different than a lawyer who is targeting companies as a client. Once you know who your ideal client is, it becomes easier to attract them with your marketing.
Referral sources are important to all lawyers and you must market to them as heavily as you would market to a prospective client. This marketing should be measured in exactly the same way as you measure direct-to-client marketing initiatives.
Lifetime Value of the Relationship
Once you have attracted and engaged a client or referral source, how much is that relationship worth to your law firm?
A client (or referral source) who brings you 10 matters each year for a value of $100,000 per year is worth far more than 100 clients who bring you one matter valued at $1,000 during your lifetime relationship with them. You can spend more to attract the client with 10 matters per year because you will receive a better return on your investment.
Knowing this lifetime value number is critical to determining how much to invest in marketing. High value targets can withstand significant investments.
Cost of Acquisition
What is it going to take to attract this client?
As stated above, you can spend more to attract better clients. But knowing what it is going to cost to do so is important. If you are targeting corporate clients, there is a good chance they already have a lawyer. It is much more difficult to unseat the incumbent in the relationship than it is to establish a business relationship with someone who has no lawyer.
Understanding client acquisition cost is important to determining your marketing budget.
We just touched on these important metrics. Give them some thought.
How will they impact your law firm marketing decisions?
Law Firm Marketing Increases the Value of Your Practice
How Does This End For You?
Have you given any thought to what will happen when you decide to retire?
Even if you have a couple of decades before this becomes a reality, now is the time to think about THE END.
Because everything you do influences the value of your law firm. This is especially true of your law firm marketing.
Over time, you may accumulate some assets that your law firm will own. Some of these will appreciate and some will depreciate. But the most valuable assets you have are your client database and your business systems. Let’s take a brief look at each of those to see the value they provide.
Ideally, your law firm can (and does) run efficiently whether you are there or not. Everything from client intake to some of the basic services you provide should be automated and scripted so that they can be handled effectively and efficiently without you. On most cases, the input you provide should be limited to development of case strategy and marketing strategy. The execution of the day-to-day tactics (both operational and marketing) should be left to your team. (On cases where clients have specifically asked for you, a premium fee should be charged and you should work the case personally).
These systems not only make the office run smoothly, they also provide you with better quality of life. That is what the attorney who eventually purchases your law firm will pay for. This is a tremendous advantage.
Included in your database of past and current clients is your database of referral sources. All of the people in this database are folks who know you, like you and trust you. And they are not shy about sharing your information with people who ask for it.
This is valuable because it provides an ongoing revenue stream for the future owner. In most cases, when an attorney starts a new law practice, they have to start from scratch. In the case of your law firm, someone taking over can simply continue to communicate with the client and referral database and they will enjoy the same stream of referrals you have, for years to come.
Realizing that these two areas provide the most value for your law firm is one thing. Doing something to create and increase value from these areas is something completely different. This involves work. That means:
1). Creating systems that make the day-to-day operation of your law firm foolproof and
2). Developing and nurturing your client/referral source database.
Law firm marketing does not just make things easy for you now; it helps you prepare for the future. You should be building equity so that your life’s work can provide you with a significant return when you are ready to sell.
Thoughts on Motivation, Lawyers and Marketing
I am a marketer and business strategist.
I am good, some would say excellent, at helping attorneys attract and retain clients.
I didn’t always work with lawyers. For a number of years I worked with business owners, managers and executives in many industries. My only guidelines for accepting new clients were that their business was operated in a legal, moral and ethical manner.
I made a decision to focus exclusively on working with attorneys. I did this because I felt there was an underserved need for business fundamentals, strategy and marketing savvy in the profession.
That assumption was correct.
I don’t question the motivation of anyone who chooses to become a lawyer. Some folks go into the law because they want to break new ground – set precedent. Some folks become attorneys because they have a desire to help others. Some folks become lawyers because they want to make a lot of money. Some folks are motivated by all three things.
I have worked with people who are motivated by each of these factors. Marketing and business strategy can help an attorney no matter what his/her motivation.
For the lawyer who likes to break new ground: We develop a strategy for attracting the kinds of matters that are likely to need new precedent in order to be successful. We then position the attorney (marketing) as the logical choice to help the client in this particular predicament.
For the attorney who wants to help people: Finding someone to help is generally not the hard part. Finding the RIGHT someone to help can be difficult. If you work in private practice you can only take on a select few cases pro bono. This means that you need to attract the majority of your clients from a pool of people you can help who can actually pay you something. Finding those people and getting them to hire you is where marketing and business strategy are helpful.
For the attorney who wants to make lots of money: Identifying, attracting and retaining the best clients with the highest value are great uses for a sound business strategy and good marketing.
I am essentially making two points:
- Marketing and business strategy are not the enemy of a good lawyer. If they are used correctly, they can help any lawyer in private practice.
- Nobody has the right to question your motivation as long as you operate in a legal, moral and ethical manner.
Attorneys love to argue about marketing and motivation. They love to bash their fellow attorneys who have made their law firms into large productive businesses. I don’t partake in those arguments because I am personally in business for all of the reasons I outlined above. I like helping people (and many attorneys desperately need business help). I like doing new things in my field (setting precedent). And I like making money. I find that the people who judge my motivation are usually envious of my success in any or all of these areas.
One of my first mentors once told me that people who complained about someone making “too much money” were people who didn’t have any money themselves. I wonder if the same is true of people who question the motivation of someone who does their job because of the money they make…
In a perfect world we would all do what we love and make as much money as we wanted while doing it. Until that world exists I’ll keep helping the people who show up regardless of why they came to me.
Page 1 of 1 pages